Source: Daikang's Strategic World
The Spring Festival consumption data significantly picked up in line with market expectations, while A shares opened high and went low on the first day after the festival, and some investors were worried about the "time" and "space" of consumption to continue to repair. however, we judge-- (1) repair "space": some of China's pharmaceutical, food and beverage and leisure service segments still have more room for repair than the "highs" after the global "third stage" epidemic prevention optimization. (2) repair "time": consumer goods in the travel chain can continue to be repaired until March, and medicine can still obtain sustained excess returns even after "coexistence". (3) We judge that the policies of "steady growth" and "expanding domestic demand" of the real estate chain help to strengthen the sustainability of China's consumption market.
Spring Festival consumption: post-epidemic consumption repair, how to evaluate the "performance-to-price ratio"?
(1) during the Spring Festival "Golden week", most of the consumption data are repaired to 22 years, but there is still room for 19 years.
(2) from the perspective of static economy & valuation, consumer demand has been basically repaired, but the willingness to spend is still low, and catering and cinemas are still "cost-effective" industries.
(3) from the perspective of dynamic valuation & profit expectation, it is currently in the "early cycle" of a new round of profit recovery in 23 years, compared with the "early cycle" of the past four rounds of profit recovery. Dynamic valuation is on the low side-the consumer industry with high profit expectation (high "performance-to-price ratio") is mainly concentrated in:Food and beverage / medicine biology / hotel catering and other sub-industries.
International comparison: how much room for repair is there in the consumer industry?
(1) Google Mobility data show that after the optimization of epidemic prevention in the "third stage" of overseas countries, consumer demand has basically been repaired. The determination of necessary consumption repair is higher, while the flexibility of optional consumption repair is greater.
(2) learn from overseas experience: we can "quantify" the fundamentals of overseas consumption segments after the optimization of epidemic prevention in the "third stage" & the "space" for market performance repair. combined with the degree to which the current domestic consumer industry has been repaired, it is "quantitatively" calculated that there is still more room for repair in China--Medicine (biological products / medical services / medical devices / chemical pharmaceuticals), food and beverages (snack food / seasoning fermented products) and leisure services (tourist attractions / airports), etc.
Domestic prediction: how long will the consumer market last?
(1) in 22.11.30 "Global comparison of epidemic Prevention Policy Optimization" and 22.12.15 "epidemic Prevention Optimization: short-term impact vs medium-term opportunities", the three main investment lines of epidemic prevention optimization (consumption restart, valuation repair, epidemic prevention "new normal") have all achieved significant excess returns.
(2) after the optimization of epidemic prevention in the "third stage", consumer goods in the travel chain can continue to obtain excess returns for 5-6 months, and the first stage of the domestic travel chain consumer stock market is expected to last until March this year.
(3) the medicine can still obtain the sustained excess income after the substantial "coexistence", and it is expected that the domestic pharmaceutical industry can continue to obtain the excess income.
Policy outlook: the policy of "steady growth" + "expanding domestic demand" is expected to enhance the sustainability of the consumer market.
Since the "COVID-19" epidemic, the excess savings rate of Chinese residents has rebounded, showing a relatively strong spending power. However, due to the constraints of lower employment and income expectations, the central bank's survey of urban depositors shows that Chinese residents' willingness to spend is still relatively low. We judge that the policy of "steady growth" of the real estate chain + the policy of "expanding domestic demand" will help to repair the consumption will of Chinese residents and enhance the sustainability of the consumption market (time-space).
Risk Tips:The epidemic has been repeated, the economy has fallen short of expectations, liquidity has tightened, and Sino-US relations are uncertain.
Edit / Corrine